Describe how the cash flow statement helps investors

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Question 1
Financial Statements all have a goal. The cash flow statement does as well.

Requirements
Describe how the cash flow statement helps investors and creditors perform each of the functions:
a. Predict future cash flows
b. Evaluate management decisions
c. Predict the ability to make debts payments to lenders and to pay dividends to shareholders.

Question 2
Jelly Bean Ltd began 2015 with cash of $53,000. During the year, Jelly Bean earned revenue of $597,000 and collected $621,000 from customers. Expenses for the year totalled $437,000, of which Jelly Bean paid $427,000 in cash to suppliers and employees. Jelly Bean also paid $145,000 to purchase equipment and a cash dividend of $54,000 to its shareholders during 2015.

Requirement
Prepare the company's cash flow statement for the year ended 31 December 2015. Format operating activities by the direct method.

Attachment:- Practical Work.rar

Verified Expert

This assignment contains solution in regard to the cash flow at the end of the particular period.The cash flow statement is useful in the business due to various reasons and thus also helps the management in solving different problems.The cash flow statement is prepared by using cash inflows and outflows during the period.

Reference no: EM132207847

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